Flashing The Cash
Loans have been a part of domestic finance for several centuries and lenders keep coming up with new ways to lend money to borrowers. One method that is beginning to catch on is the cash advance loan. This is also called a payday loan or cheque advance loan and there are many other terms to describe it. There are hundreds of companies offering cash advance loans. A cash advance loan is exactly what it says. It's way for people to borrow cash before they get paid. Consider this situation:
A borrower with a poor credit history has an unexpected expense and needs to borrow some money. The borrower is over 18, a UK resident and has been employed for the last three months. The borrower has a bank account and can show that his or her salary has been paid into that account over the last three months. This borrower is a perfect candidate for a cash advance loan.
The Cash Advance Application Process
The borrower goes to one of the hundreds of high street or online lenders with proof of earnings and identity and fills in a simple form. There are no hard credit checks, so the borrower's poor credit history will not stop him or her from getting a loan. Approval is quick and painless and the money (up to £1,000 depending on the circumstances) will be paid into the borrower's bank account within 24 hours.
The lender charges a fee for the cash advance. This is either a fixed rate or a percentage of the amount borrowed. At the end of the next pay period of two weeks or a month, the cash advance loan must be repaid. This is a good solution for people with a short term financial difficulty who know they have money coming in.
Borrowers who cannot repay on the due date may be able to extend the loan period for another month. They will have to pay an additional fee for this. And at the end of the extended period, they must repay the outstanding amount. If not, they can't borrow any more money and the lender will call in a collections agency. This will harm the borrower's financial standing and credit rating.
The fee charged by lenders for cash advance loans is very high, with the APR on some loans estimated at up to 300%, so it is not a good idea to use this method for long term borrowings. For a long term financial problem, there are other options which might work. It would not be a good idea to become dependent on cash advance loans.
Choosing A Cash Advance Provider
To choose from among the hundreds of cash advance lenders, borrowers should look carefully at the information that lenders make available. Some questions to ask are:
- Does the lender have a website?
- Are the details of fees or interest clearly stated?
- What is the APR?
- Is there contact information for the lender?
- Is there an additional service charge or application fee?
- How long have they been trading?
- Is anything known about this company at the Office of Fair Trading?
Answering these questions will help borrowers to choose a cash advance loans on terms which suit them best.
- The Benefits of Credit Cards
Love them or hate them credit cards are here to stay. The next time you whip out your little plastic friend spare a thought for what life was like before they came along.
- Cashback Credit Cards
Cashback is just one of a long list of incentives on offer from the credit card companies to get your business and then to hang on to that business.